USD/JPY pair decreased in value during Thursday trade session, as Japanese bond yields reached one year highs and data showed that China’s manufacturing sector shrank for the first time in seven months during May.
The pair fell to 101.42 during Asian session, which was lowest value since May 14th, after which recorded certain gains, increasing to 101.85. Support levels were expected at 101.25, lowest value from May 14th, while the cross was likely to meet resistance at 103.00.
Japanese yen strengthened versus all the major currencies as Japan’s Nikkei 225 dropped by 7.3% after the yield on Japanese government bonds rose to one year highs.
In testimony to the U.S. Joint Economic Committee on Wednesday, Ben Bernanke said that a scale back in asset purchasing was too soon and such a decision would depend on economic conditions. US dollar rose to a new 4,5 year high against the yen after Bernanke remarked a premature tightening of monetary policy could carry substantial risks to the economic recovery.
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